Summary

The law firms have nearly Sh800 million locked in the financially troubled Chase Bank.

Nairobi-based Walker Kontos tops the list of 42 law firms that had huge deposits in the collapsed lender, with Sh223 million to its name. The amount, Walker Kontos says, is in a client account it holds at Chase Bank.

Sheikh & Company Advocates is the second-largest depositor with a Sh130.4 million claim.

The listed law firms are collectively pursuing Sh776.8 million from Chase Bank, but this is only part of the total claim of Sh2 billion that the advocates have filed.

42 law firms’ cash in troubled Chase Bank

More than 40 law firms have nearly Sh800 million locked in the financially troubled Chase Bank, new court filings have revealed.

The hefty amount, which mainly consists of clients’ cash deposited with the law firms, points to the financial turmoil that the collapse of the mid-tier bank in April last year plunged thousands of Kenyans into.

The amounts are revealed in the Law Society of Kenya’s bid to join the Kenya Deposit Insurance Corporation’s (KDIC) suit against former top officials of Chase Bank who are accused of looting the lender.

Nairobi-based Walker Kontos tops the list of 42 law firms that had huge deposits in the collapsed lender, with Sh223 million to its name. The amount, Walker Kontos says, is in a client account it holds at Chase Bank.

Sheikh & Company Advocates is the second-largest depositor with a Sh130.4 million claim.

The listed law firms are collectively pursuing Sh776.8 million from Chase Bank, but this is only part of the total claim of Sh2 billion that the advocates have filed.

The lender was re-opened under management of the KDIC and KCB #ticker:KCB after its collapse early last year, but big depositors are yet to access their funds in full.

The Central Bank of Kenya (CBK) is leading an effort to sell the lender to a strategic partner as part of its revival plans. Mauritius-based SBM Holdings has showed interest in acquiring Chase Bank, a move that may come as a reprieve for the collapsed lender’s depositors.

Lawyer Anthony Frederick Gross is also listed as having had a client account with the bank, in which he had deposited $1 million (Sh103 million).

Mr Gross is one of the respondents in the suit Chase Bank’s receiver managers have filed against former managers and directors to recover Sh14 billion. He was a non-executive director of the bank.

The receiver managers, however, do not make any particular accusations against Mr Gross in documents filed before the High Court. The LSK has filed in court the list of law firms that asked it to help them in their pursuit of deposits recovery.

“We have a number of client deposits with Chase Bank. The aggregate amount of the client deposits is Sh223,252,803.05, excluding interest. We look forward to receiving an update following your deliberations with the Central Bank of Kenya. We are also willing to offer any additional support you deem useful,” Walker Kontos says in its letter to the LSK that has now been filed as evidence in court.

The KDIC is seeking to recover Sh14 billion from nine individuals and 11 companies accused of looting depositors’ funds. Chase Bank collapsed last year on the day it published its restated financial results that showed it had under-reported insider loans by Sh8 billion.

The LSK itself has Sh39.3 million saved at the bank. Chase Bank subsidiaries Ghengis Capital and Boulevard Properties Limited have opposed the LSK’s bid to join the suit on grounds that civil procedure rules do not provide for interested parties to do so.